offering memorandum sale-leaseback 5045 G eist Avenue, Las Vegas, NV DAVE WRZESINSKI BEN MILLIS

Transcription

1 offering memorandum sale-leaseback 5045 G eist Avenue, Las Vegas, NV EXCLUSIVE LISTING AGENTS: BEN MILLIS Principal, Industrial ben.millis@avisonyoung.com DAVE WRZESINSKI Senior Associate dave.wrzesinski@avisonyoung.com

2 EXECUTIVE TABLE OF CONTENTS SUMMARY 01 EXECUTIVE SUMMARY The Offering 3 Property Profile 4 02 PROPERTY OVERVIEW Floor Plan 5 Property Aerial 7 Surrounding Area 8 Location Overview 9 04 PROFILES Tenant Profile 13 Marijuana Sales in Nevada 15 General Contractor Profile MARKET DATA Las Vegas Industrial Market 17 Las Vegas Highlights FINANCIALS Financial Overview 10 Rent Roll 12

3 EXECUTIVE SUMMARY THE OFFERING Avison Young is exclusively offering this unique opportunity to acquire 5045 Geist Avenue, a brand-new, single tenant, triple net-leased, Class A cultivation facility totaling ±63,624 square feet. The building is estimated to be completed in February of 2019 and has been specifically built for Alternative Medicine Association (AMA), as a marijuana cultivation facility. AMA was the first licensed cultivator to sell cannabis in Las Vegas and works closely with the state of Nevada to set the standards for it. ALTERNATIVE MEDICINE ASSOCIATION FIRST EVER LICENSED CULTIVATOR IN NEVADA Price $10,775,000 Cap Rate 8.5% Term 10 Years & Two, Five Year Renewals Address 5045 Geist Avenue, Las Vegas, Nevada Size ±63,624 SF Year Built 2019 Acreage 1.39 Acres Stories 2 Parcel Number Percent Leased 100% No. of Tenants 1 Alternative Medicine Association Avison Young 3

4 SECTION 01 EXECUTIVE SUMMARY PROPERTY PROFILE Located at 5045 Geist Avenue, the property is currently being developed as a ±63,624 square foot two-story, purpose-built cultivation facility for Alternative Medicine Association. The building improvement is being developed on a site that contains 1.39 acres which is zoned M-1 (Light Manufacturing) by the Clark County Zoning Department. According to the floor plans prepared by George M. Rogers Architect, the building will include vegetation/cultivation rooms, packaging areas, supporting offices, a vault, Men s and Woman s locker rooms, climate/humidity controlled rooms and other work areas. When complete this will be a state-of-theart cultivation facility that will be occupied by Alternative Medicine Association and guaranteed by 1933 Industries, Inc. Construction Type Sprinklers Power Auto Parking Spaces General Contractor Architect Concrete Tilt-Up ESFR 2,000 Amps, Three Phase ±79 Parking Spaces Bentar Development GMRA Construction Progress as of 12/20/18 Alternative Medicine Association Avison Young 4

5 SECTION 02 FLOOR PLANS 1ST FLOOR ±32,063 SF Alternative Medicine Association Avison Young 5

6 SECTION 02 FLOOR PLANS 2ND FLOOR ±31,561 SF Alternative Medicine Association Avison Young 6

7 EXECUTIVE SUMMARY 1933 INDUSTRIES ±12,000 SF Building for Extraction Not a part of this Sale GEIST AVENUE SUBJECT ±63,624 SF BUILDING ±1.39 ACRES 1933 INDUSTRIES ±2.78 Acres for Expansion Not a part of this Sale NELLIS BOULEVARD ALTO AVENUE Alternative Medicine Association Avison Young 7

8 LAMB BLVD SECTION 02 SURROUNDING AREA McCARRAN INTER L AIRPORT THE LAS VEGAS STRIP LAS VEGAS BLVD NELLIS BLVD SUBJECT Carey Industrial Center Lamb Technology Cheyenne Center Distribution Center Sunrise Industrial Center Cheyenne Industrial Center Northpoint CHEYENNE AVENUE LogistiCenter Cheyenne Walker Distribution Center Alternative Medicine Association Avison Young 8

9 SECTION 02 LOCATION OVERVIEW SUBJECT LAS VEGAS STRIP Alternative Medicine Association Avison Young 9

10 SECTION 03 FINANCIAL DATA FINANCIAL OVERVIEW Price $10,775, Year IRR 11.49% Price Per Sq. Ft. $ Year 1 Cap Rate 8.50% Cash on Cash 8.46% Annual Rent Increases 3% Lease Type Absolute NNN 10 YEAR LEASE EFFECTIVE 2/1/19 ABSOLUTE NNN. RENEWAL INCREASES AT 3% ANNUALLY Year 1 Monthly Base Rent $76,349 Year 1 Net Operating Income $916,186 A FEW AMA PRODUCTS Terms Cash or Cash to New Loan SHATTER TROPICAL THUNDER THC OIL TANGERINE DREAM DISTILLATE PEN Alternative Medicine Association Avison Young 10

11 SECTION 03 FINANCIAL DATA INITIAL INVESTMENT SALE PROCEEDS BEFORE TAX Purchase Price $10,775,000 Sale Price $15,391,000 + Acquisition Costs $53,875 - Cost of Sale $769,550 + Loan Costs 0 - Mortgage Balance 0 - Mortgage 0 = INITIAL INVESTMENT $10,828,875 = SALE PROCEEDS $14,621,450 PERFORMANCE MEASURES Gross Rent Multiplier Cash on Cash 8.46% Acquisition Capitalization Rate 8.50% Internal Rate of Return 11.49% Net Present Value $14,295,616 BEFORE TAX INTERNAL RATE OF RETURN EOY $ 0 ($10,828,875) 1 $916,186 2 $943,671 3 $971,981 4 $1,001,141 5 $1,031,175 6 $1,062,110 7 $1,093,974 8 $1,126,793 9 $1,160, $1,195,414 + $14,621,450 IRR 11.49% ANNUAL CASH FLOWS BEFORE TAX EOY Potential Rental Income $916,186 $943,671 $971,981 $1,001,141 $1,031,175 $1,062,110 $1,093,974 $1,126,793 $1,160,597 $1,195,414 $1,231,277 - Vacancy & Credit Losses = Effective Rental Inc $916,186 $943,671 $971,981 $1,001,141 $1,031,175 $1,062,110 $1,093,974 $1,126,793 $1,160,597 $1,195,414 $1,231,277 + Other Income = Gross Operating Inc $916,186 $943,671 $971,981 $1,001,141 $1,031,175 $1,062,110 $1,093,974 $1,126,793 $1,160,597 $1,195,414 $1,231,277 - Real Estate Taxes Insurance Repairs & Maintenance Landscaping Property Management = Net Operating Income $916,186 $943,671 $971,981 $1,001,141 $1,031,175 $1,062,110 $1,093,974 $1,126,793 $1,160,597 $1,195,414 $1,231,277 - Annual Debt Service Leasing Commissions = Cash Flow Before Taxes $916,186 $943,671 $971,981 $1,001,141 $1,031,175 $1,062,110 $1,093,974 $1,126,793 $1,160,597 $1,195,414 Alternative Medicine Association Avison Young 11

12 SECTION 03 RENT ROLL Tenant Lease Start Date Lease Expiration Date SF Building Share Effective Annual Rent Annual Rent PSF Monthly Rent Alternative Medicine Assoc 02/01/19 01/31/28 63, % 02/01/19 $ 916, $14.40 $76, $1.20 TOTALS $10,503, % Annual Increases Monthly Rent PSF 02/01/20 $943, $14.83 $78, $ /01/21 $ $15.28 $80, $ /01/22 $1,001, $15.74 $83, $ /01/23 $1,031, $16.21 $85, $ /01/24 $1,062, $16.69 $88, $ /01/25 $1,093, $17.19 $91, $ /01/26 $1,126, $17.71 $93, $ /01/27 $1,160, $18.24 $96, $ /01/28 $1,195, $18.79 $99, $1.57 Alternative Medicine Association Avison Young 12

13 SECTION 04 TENANT PROFILE ABOUT ALTERNATIVE MEDICINE ASSOCIATION CSE: TGIF OTCQB: TGIFF ABOUT 1933 INDUSTRIES, INC Industries Inc. is a vertically integrated cannabis company with operations in the United States and Canada. Operating through three subsidiary companies, 1933 Industries owns licensed medical and adult-use cannabis cultivation and production assets, proprietary hempbased, CBD infused products, CBD extraction services and a specialized cannabis advisory firm supporting clients in security, intelligence and due diligence Industries has three arms of operation: Alternative Medicine Association, Infused MFG and Spire Alternative Medicine Association stands proud as the first licensed cultivator to sell cannabis in Las Vegas, helping to sow the seeds of the cannabis CORPORATE ENTITY HEADQUARTERS FOUNDED 1933 Industries, Inc. Chilliwack, Canada 2008 industry s rise throughout the state INDUSTRY Research Services of Nevada. As pioneers of marijuana, WEBSITE 1933industries.com they ve worked closely with the state to set the standards for cultivation to what they should be, ensuring that each bud they trim offers patients TICKER CSE: TGIF and recreational users alike a cannabis experience that s exceptional, potent, and consistent in quality. Alternative Medicine Association passionately continues to break down the walls of the cannabis industry, helping patients heal, offering recreational users an exceptional experience and continuing to discover the many benefits of marijuana yet to unfold. Alternative Medicine Association s founding team began in California, legally cultivating cannabis for as long as possible while working in compliance with the ever-changing state regulations. When updating with the state s rules became too complicated, the growers moved their operations to Nevada, where the marijuana industry was just getting started. With decades of growing experience and a passionate belief in the medicinal benefits of cannabis, the founders over time had developed particular methods of quality control and cultivation Alternative Medicine Association Avison Young 13

14 EXECUTIVE SUMMARY SECTION 04 TENANT PROFILE to provide safe medical marijuana for very specific health conditions. Committed to continuous innovation and the medical aspects of marijuana, Alternative Medicine Association formed, and eventually sold the very first amount of cannabis in Nevada in August of Since this landmark event, Alternative Medicine Association continues to develop new tracking and storing methods, and within 2019 will expand into a new, state-of-the-art cultivation facility M VISITORS TO LAS VEGAS IN 2017 SOURCE: LAS VEGAS CONVENTION & VISITORS AUTHORITY ALTERNATIVE MEDICINE ASSOCIATION LAS VEGAS, NEVADA Fully integrated licensed medical and adult-use cannabis cultivation and production company Cultivates and produces its own line of unique cannabis-based products and manufactures other third party brands Alternative Medicine Association Avison Young 14

15 MARIJUANA SALES IN NEVADA $336.4 M Total Sales of Medical Marijuana, recreational marijuana and marijuana related goods through February, 2018 $263.7 M Recreational Marijuana Sales July 1, February 28, 2018 MARIJUANA SALES From July 2017, when marijuana sales began, to April 2018, monthly sales increased about 30 percent. The taxes paid by wholesalers and customers almost doubled in that time. SOURCE: STATE OF NEVADA, LAS VEGAS REVIEW JOURNAL $264.8 M Recreational marijuana sales projected for fiscal 2018 July 1, June 30, 2018 SOURCE: STATE OF NEVADA, LAS VEGAS REVIEW JOURNAL SOURCE: STATE OF NEVADA, LAS VEGAS REVIEW JOURNAL Alternative Medicine Association Avison Young 15

16 SECTION 04 GENERAL CONTRACTOR PROFILE About Bentar Development Founded in 1991, Bentar Development, Inc. is a well-established and respected design/build general contractor and professional manager of construction services. The award-winning company is owned by long-time Nevada resident Amador Chi Chi Bengochea. Bentar s mission is simple: Dedication, growth, diversity and incomparable construction quality, and unwavering commitment to our client s satisfaction. Bentar is licensed and bonded in the State of Nevada with an unlimited contract limit and prides itself on aggressive schedules that are unmatched by other contractors in the local industry. CORPORATE ENTITY Bentar Development Inc. HEADQUARTERS Las Vegas, Nevada FOUNDED 1991 INDUSTRY Building Contractor WEBSITE bentar.com TICKER Privately Held EMPLOYEES Approximately 25 The company delivers a wide range of commercial, industrial, retail, casino, office and recreational projects in the Las Vegas market. A sampling of some of the companies high-profile projects include: 70-plus Terrible Herbst service stations, three Terrible s hotel/casino properties in Southern Nevada, the Primm Valley Resort Travel Center, which is the largest automobile service station with 30 fuel nozzles in the west, the new Tangerine at Treasure Island, the Revolution Bar at the The Mirage, Red Rock Casino Resort Bowling Alley, Montana Steakhouses, The Lodges, more than a dozen Del Taco outlets, other restaurants, retail, office and schools. A few of Bentar recent projects: An Award Winning Construction Company Bentar was inducted as the 2011 Minority Business Hall of Fame Chi Chi Bengochea, owner of Bentar Development, Inc. named Small Business Person of the Year by the Small Business Administration (SBA). Annual Contractor of the Year Latin Chamber of Commerce Ten Best Contractors List by the Nevada Business Journal Builder/Architect Magazine, Southern Nevada Edition, September 2004 cover story Bengochea Brothers General Contracting Firm Impacting Las Vegas Commercial Building Scene Bishop Gorman Training & Expansion Facility Mountains Edge Hospital Alternative Medicine Association Avison Young 16

17 SECTION 05 LAS VEGAS INDUSTRIAL MARKET OVERVIEW Activity in the industrial market continued strong in the third quarter. There was approximately 844,240 square feet of new deliveries with almost 5 million square feet under construction. These new deliveries pushed vacancy down slightly to 5 percent with approximately 525,826 square feet of positive absorption. Average asking lease rates for distribution product remained the same while average asking rates for flex spaces increased slightly. There were approximately 183 industrial leases executed in the third quarter of While the largest lease was 163,000 square feet, there were only four leases completed over 40,000 square feet, with a majority being under 15,000 square feet. By comparison, there were approximately 257 industrial leases executed in the third quarter of The largest lease was 300,805 square feet, with a majority being under 10,000 square feet. In the third quarter of 2018, there were approximately 93 industrial sales, with the largest sale being a 156,564 square foot warehouse in the Henderson submarket which sold for $20,200,000. A majority of the sales that took place were under 40,000 square feet. By comparison, there were approximately 103 industrial sales completed in the third quarter of The largest sale was a 248,126 square foot warehouse in the North Las Vegas submarket which sold for $24,500,000. A majority of sales that took place in the third quarter of 2017 were under 40,000 square feet. By the end of the third quarter, there was approximately 844,240 square feet of deliveries and 4,683,806 square feet of industrial product under construction. In the third quarter of 2017, there was 2,755,510 square feet of deliveries and 4,229,469 square feet was under construction. Vacancy Rates Asking Rents Absorption MARKET FACTS 3RD QUARTER ,240 Square footage of deliveries 4,683,806 Total square footage under Construction 93 Number of Industrial Sales 183 Number of Industrial Leases Signed Flex Distr. Alternative Medicine Association Avison Young 17

18 SECTION 05 LAS VEGAS INDUSTRIAL MARKET Market Indicators Submarket Total SF * Vacant SF Vacancy Current Net Absorption YTD Net Absorption Under Construction Avg. Asking Rate Flex Avg. Asking Rate Mfg./Distr. Airport/East 15,294, , % 116, , ,752 $0.97 $0.77 Central/Downtown 13,270, , % 48,711 99,848 0 $0.65 $0.62 North Las Vegas 40,506,191 2,564, % 247,034 1,683,150 1,935,863 $0.62 $0.43 Northwest 880,168 46, % (12,468) (12,906) 0 $0.87 $0.81 Henderson/SE 17,194, , % 56, , ,030 $0.65 $0.57 Speedway/NE 4,141, , % (67,723) (50,062) 1,784,245 $0.45 $0.46 Southwest 29,929, , % 120, , ,916 $0.94 $0.56 West 10,806, , % 16, ,396 0 $0.80 $0.60 Totals 132,023,147 6,553, % 525,826 3,775,567 4,683,806 $0.88 $0.48 * Includes buildings over 5,000 SF Top Transactions of the Quarter Tenant/Buyer Address Submarket Size Term Rate/Price Suncrest Industrial, LLC 1051 Mary Crest Road Henderson/SE 156,564 SF Sale $20,200,000 CLV Warehouse, LLC 4325 Corporate Center Dr North Las Vegas 155,790 SF Sale $16,231,760 Xtreme Manufacturing 8390 Eastgate Road Henderson/SE 163,000 SF 120 Months $0.57/SF Ruby Has 3717 Bay Lake Trail North Las Vegas 97,080 SF 60 Months $0.35/SF n/a 2695 North Lamb Blvd North Las Vegas 56,847 SF n/a $0.30/SF Alternative Medicine Association Avison Young 18

19 SECTION 05 LAS VEGAS HIGHLIGHTS LVCC Expansion Las Vegas Convention Center is currently undergoing a $2.5 billion, 600,000 square foot expansion to absorb excess demand. NHL Team The Vegas Golden Knights opened their inaugural season on October 10, 2017 at the T-Mobile Arena and the entire city has been rallying behind these golden boys ever since. $1 Billion Public Works Project Project Neon just began the final stage of the largest and most expensive public works project ever in the state of Nevada. The project will widen Interstate 15 from the U.S. 95 interchange to Sahara Avenue. The improvements to the busiest stretch of road in Nevada are expected to be complete in the summer of 2019 Mandalay Bay Convention Center Recently underwent a 350,000 square foot expansion and is now the 5th largest convention center in North America. The Las Vegas Raiders Ground was broken on November 14, 2017 for the 1.9 billion 65,000 seat, domed stadium that will be the new home of the Las Vegas Raiders when completed in This will also be home to the UNLV Rebels when completed. 20,000 Seats The T-Mobile Arena opened April 6, 2016 and seats 20,000 for sporting events, concerts and award shows. The Park, which is just adjacent to the T-Mobile is Las Vegas' newest entertainment spot before the big game or concert. Alternative Medicine Association Avison Young 19

20 Exclusively Marketed By: BEN MILLIS Principal, Industrial DAVE WRZESINSKI Senior Associate AVISON YOUNG Griffith Peak Drive, Suite 100, Las Vegas, N V avisonyoung.com 5045 GEIST AVENUE, LAS VEGAS, NV 89115